Ethanol's African Land Grab

Mozambique has survived colonialism and civil war. But can it survive the ethanol industry?

massingir is an unremarkable town. The electricity supply here in rural Mozambique is erratic, clean water is hard to come by, and the hotels—well, calling them hotels is a little too polite. The town center is two ragged blocks of colorful bars, stores, and market stalls arranged along a reddish sandy furrow—the main street—with goods packaged in the smallest possible quantities to match the pinched cash flow of local buyers: individual quarts of fuel in old bottles, spoonfuls of soap powder in bright little packets, single cigarettes, microcans of tomato paste and sardines, all laid out in creative patterns to catch the eye. Babies doze in the shade while their mothers gossip, pausing on the way back from the unicef tent outside the shabby clinic; loose-limbed teenagers play rough games of pool under a thatched roof by the side of the road.

Hardcore nature nuts sometimes pass through Massingir; tourism has been picking up as word spreads of the giant Great Limpopo Transfrontier Park, a "peace park" that will merge the Mozambican wilderness of the nearby Limpopo National Park with South Africa's world-famous Kruger National Park (just across the border) and some adjacent Zimbabwean wildlands to make one of Africa's largest protected areas.

But I'm here for something bigger than elephants. This backwater is also the beachhead for an enormous project that promises to spend some $500 million, employ at least 2,000 people, and use nearly 75,000 acres of native woodland and savanna—an area five times the size of Manhattan—to grow sugarcane and produce ethanol for the growing global biofuel market. Known as ProCana, it's an endeavor that could not just transform Massingir, but also, via a mess of land claims and conflicting promises, put at risk the transnational park and other significant conservation projects.

ProCana is just the first in a long line of massive biofuel projects backed by investors ranging from local speculators to multinational corporations like BP. Some have asked the government—which legally owns all land here—for entire districts (the equivalent of US counties). Government officials told me that as of 2007, biofuel investors had applied for rights to use about 12 million acres, nearly one-seventh the country's 89 million acres of arable land; unofficial tallies are double that. The message is clear: This country, almost twice the size of California, is beckoning the plow. ProCana and its ilk are the vanguard of an underreported land revolution—a movement that could reshape vast terrains and the livelihoods of millions as international agribusiness sets its sights on the cheap soil of Africa.

i find the big man of ProCana, Izak Cornelis Holtzhausen—Corné to his friends—in an unexceptional '60s modernist office block in Maputo. A secretary shows me to a small boardroom with new furniture, extremely shiny parquet floors, and a promotional banner for a new coal mining area along the Zambezi River. Holtzhausen walks in, plants himself sideways at the table, and introduces himself with a charming smile; as we talk, his chubby fingers spin a tiny cell phone in unbalanced orbits on the table.

Holtzhausen is the Mozambique manager of the Central African Mining & Exploration Company (camec), which does what its name suggests and owns half of ProCana. He won't tell me who owns the other half ("Ask me next month"), and he doesn't want to talk about camec at all. There's been too much in the media about the company's allegedly corrupt mining deals in the Democratic Republic of the Congo and its connections with two notorious white Zimbabwean businessmen, Billy Rautenbach and John Bredenkamp, who were blacklisted by the US Treasury Department in November for their support of Zimbabwean despot Robert Mugabe. (Six months after our interview, a British Virgin Islands-based company named BioEnergy Africa, led by top camec officials, bought 94 percent of ProCana; Holtzhausen remains its head.)

An Afrikaner born and raised in South Africa (he served in the apartheid-era army and often uses Afrikaans in conversation), Holtzhausen has taken Mozambican citizenship and married a Mozambican woman of color. He believes in the place. Many Afrikaners, he says, ask him for business connections in Mozambique. "Most of them are scum. Absolute scum. They go on about the bad black government over there, and when they start using the k-word"—kaffir, the racist slur—"I just put the phone down on them. Afrikaners have caused a lot of trouble in Africa."

Mozambique is set to become a major biofuels producer, Holtzhausen assures me, and other agribusiness ventures are booming, too. (Among other things, he has a stake in the country's growing beef industry.) ProCana will process its cane in a Brazilian-built sugar-ethanol factory. It will lay miles of track to link the plant up with the national rail network. Eventually, trains will take about 9.5 million gallons of ethanol a month down to the Maputo harbor, where it will be pumped into tankers and shipped to Europe. Once the operation is up and running, ProCana will be printing money.

Yes, Holtzhausen acknowledges before I even ask, he's putting his plantation in the driest part of Mozambique—but he's investing a fortune in efficient drip irrigation. "You can't produce a green fuel and waste water," he says. Still, ProCana will use 108 billion gallons of water per year, supplied via canal from the nearby Massingir Dam. I've heard that this has downstream farmers worried, but Holtzhausen says those stories are pure fiction: "I'll give you a million bucks if you find me one of those farmers!" he brags, grinning broadly.

I've also heard that much of the area ProCana aims to plant had previously been slated to complete the development of the peace park, but that Holtzhausen levered it away, leaving the project in chaos. He laughs this off, too. I tell him of rumors that he got his land rights because powerful people had equity in the venture. (The story around Maputo is that Graça Machel, widow of Mozambique's first president and now wife of Nelson Mandela, is involved in ProCana—though verifying this is near impossible.) "No prominent people have invested in ProCana," he replies, after some thought. "But it will only be good for me if she did." Machel is a friend, he says. "I would be honored to have her as an investor." Another triumphant smile.

Despite Holtzhausen's disavowals, out in Massingir I discover that many of ProCana's 75,000 acres had indeed been slated rather precisely (and publicly) as part of planning for the Transfrontier Park. Some 29,000 people still live within Limpopo National Park's borders, and as many as 9,000 in the heart of the park are supposed to be relocated. After years of delicate negotiations, park authorities have arranged for the inner 9,000 to move to the valley of the Rio dos Elefantes, just downstream of Massingir Dam. They have—as Mozambican law requires—obtained permission from "receiving" communities to build houses for the newcomers and, very important, identified a sufficiently large grazing area for the new residents' livestock.

A ProCana map I've managed to obtain shows that the company's 75,000 acres cover this intended grazing zone. The same chunk of land has been promised to both the inner 9,000 and ProCana. How did this happen? I'll need a 4x4 and two interpreters (Shangaan to Portuguese, Portuguese to English) to find the answer.

a trip into the Rio dos Elefantes valley is a journey into a cliché of Africa: hardworking women in colorful cloth, relentlessly pecking chickens, and thin, lazy yellow-brown dogs scattered around circular grass-roofed huts. In most village centers a hand-carved flagpole carries a Mozambican flag (crossed hoe and Kalashnikov, nice bright colors). Take away the occasional T-shirt, radio, and cell phone, and the ever-present cheap plastic buckets and chairs, and you have something like the Mozambique of 500 years ago. Polygamy is common, many children and cattle are a sign of wealth, and the village leader and his elders are not to be crossed. Villagers build their homes near a river, plant crops in the fertile floodplain, and graze cattle in the nearby savanna; like about 70 percent of their compatriots, they rely on the land for their livelihood.

Mozambique was colonized by the Portuguese starting in the early 1500s; they set up vast plantations whose laborers were kept in line with brutal corporal punishment. In 1975, after Portugal's Carnation Revolution, Mozambique was chaotically catapulted into independence. The civil war that followed, one of the Cold War's many proxy conflicts, shattered the country's infrastructure and killed about a million people before petering out in 1992. To this day, bullet holes pockmark buildings, amputees beg along the roads, and crushing poverty saturates the country. During one of my trips to Mozambique early last year, riots broke out a day after a high-profile visit by the president of the World Bank, who had congratulated the country on its success in becoming "a major destination for foreign invest­ment." Thousands took to the streets to protest skyrocketing prices; Mozambique's staple food, corn, had become vastly more expensive as the United States turned an increasing percentage of its crop into ethanol.

"It's important to remember that Mozambican independence was about liberating people and land," Diamantino Nhampossa, a land-rights activist, told me. Mozambique's constitution decrees that all land is owned by the state. Individuals and private companies can acquire rights to use parcels for 50-year periods, but the country's sweeping Land Law requires them to find out if any local people are already using the land and, if so, obtain their permission for any project. In theory, the law gives Mozambican peasants more power to determine their fate than their counterparts around the world. In practice, as I was to discover, the arm of the law has limited reach.